LONDON – British core wage growth slowed again, posting its weakest rise since the three months to September 2022 but remained strong by historical standards, according to official figures which are likely to be given a cautious welcome by the Bank of England.
Regular wages excluding bonuses grew by 6.0% in the three months to February compared with the same period a year earlier, down from an increase of 6.1% in the November-to-January period the Office for National Statistics said.
A Reuters poll of economists had forecast growth in regular wages – which are in the sights of the BoE as it considers when to start cutting interest rates – would slow by more to 5.8%.
“The labour market continues to gradually cool but continued high wage growth underlines concerns over inflation persistence,” Jack Kennedy, senior economist at jobs platform Indeed, said.
“With stubborn US inflation having dimmed hopes of an imminent Fed rate cut, prospects for UK rate cuts being cut before autumn also look questionable.”
Sterling fell slightly against the U.S. dollar and euro immediately after the data was published, and investors trimmed their bets on BoE rate cuts this year.
Growth in total pay, which includes more volatile bonus payments, was unchanged at 5.6%. The Reuters poll had pointed to a slight slowdown to 5.5%.
The unemployment rate rose by more-than-expected to 4.2% from 3.9%, although the ONS said there was still some volatility in its data as it overhauls its survey which produces that figure.
Vacancies fell for the 21st time in a row in the three months to March, dropping by 13,000 from the October-to-December period and down by 204,000 on a year earlier at 916,000 but remained 120,000 above their pre-COVID level.
